Cramer Dives Into Big Tech Earnings – Cramer's Mad Money (2/1/18)

Cramer said he has noticed a downward bias among investors. “I’m talking about the notion that a slowdown lurks around every corner, as people thought would be the case with Apple (NASDAQ:AAPL) tonight, or that pricing is going to get worse, a fret about Alphabet (GOOG, GOOGL), or that demand is about to taper off, the whisper that drove down the stock of Amazon (NASDAQ:AMZN) in the late afternoon. So many supposed experts and analysts keep giving you second-rate, or even just plain wrong, information,” the Mad Money host explained.

He dug into the results of these big tech companies and Facebook (NASDAQ:FB) to get a true picture of how their earnings really were, without bias.

Facebook: It reported a solid earnings beat and had good user growth. The stock got hit in AH trading as CEO Mark Zuckerberg said that time spent on Facebook went down 50 million hours after a conscious effort of showing lesser viral videos. While analysts fret that this will hurt user growth, the CEO and CFO said that an effort to improve user experience will lead to better monetization. “A better user experience does translate to more users, which translates into more money. The truth is, there’s no immutable law of the universe that says things have to go wrong,” added Cramer.

Apple: The same thing happened with Apple. The company reported a record quarter with a huge cash pile, and the analysts were worried about iPhone pricing and the fact that iPhone demand may be lesser than expected. Apple, however, gave a robust guidance on the conference call and spoke about the plan to reduce its net debt to zero with overseas cash repatriation.

Amazon: It, too, reported solid growth. “I think its stock can romp now from the $1470s, where we’re going to be when we’re going home tonight, to the $1500s in a short period of time. I’d be a buyer anywhere below $1500,” said Cramer.

Alphabet: The company had a mixed quarter, but reported growth nonetheless. “I was a tad disappointed, but then again, it had run up so much in anticipation of a blowout quarter that there was a letdown for certain,” Cramer said. “My take? Don’t lose hope, don’t lose sleep, it’s doing well,” he assured.

Don’t assume that by default everything is horrible. “Sometimes, I almost feel like it’s my job to be upbeat. But the reality is that I am not being upbeat. I’m merely being empirical. I’m telling you the facts. This is not a glass half-full, glass half-empty situation. The glass, to me, is overflowing, and anyone who tries to tell you differently, I think, is simply being rigorous, or worse, quite disingenuous,” concluded Cramer.

Rising stocks

There are stocks that are seemingly on a mission to just go higher. Cramer shared his 4 picks:

Boeing (NYSE:BA) – Boeing is the top stock on a “keep going higher” mission. “This stock has been going up pretty much in a straight line ever since we had the CEO, Dennis Muilenburg, on the show in December, when he confirmed that business is stronger,” Cramer noted. BA is headed for the $400 mark.

Mastercard (NYSE:MA) – This stock is on a mission to $200. “Mastercard reported yet another blowout quarter, which is amazing when you consider how the bar has been raised so high after all these upside surprises. This time, though, the company had a whole new angle: cryptocurrencies.”

IDEXX Laboratories (NASDAQ:IDXX) – This veterinary care provider is on a mission to head to $200. It’s a great play on the “humanization of pets” theme.

Nvidia (NASDAQ:NVDA) – This is one of Cramer’s favorite stocks that is heading towards $300, although at a steady pace. Nvidia is a key player in video gaming, machine learning, AI and IOT. The stock has run up a lot, and Cramer has asked his trust club members to trim their position.

The stock of Zebra Technologies is up 130% in the past 18 months and 17% so far in 2018. The company designs, manufactures and sells computerized barcode laser printers. It operates through the Legacy Zebra and Enterprise segments. The Legacy Zebra segment comprises barcode and card printing, location solutions, supplies and services.

Zebra Technologies had a good last quarter. It has a segment called Zebra Sports division, which is growing at a good pace. The Zebra system has chips on every NFL player and football that tracks data 80 times a second and sends it to coaches and fans. Cramer thinks the application of this data is endless.

The company forecasts 3-6% revenue growth and expanding gross margins. The stock trades at just 15 times earnings, and Cramer thinks it is undervalued. He suggested buying the stock on weakness.

Marathon Petroleum reported a good quarter with revenue growth and better-than-expected earnings. Cramer interviewed chairman and CEO Gary Heminger to find out more about the quarter.

Heminger said that the recovery in oil price has led to a resurgence in U.S. production, which translates into profits for Marathon Petroleum. He added that the company is successful due to its vast network.

It currently refines 2 million barrels of oil per day, out of which 70% is sold the following day. “Gasoline exports have been, really, I think, one of the most important fundamentals of the refining industry over the last five, six years. We exported 314,000 barrels per day in the fourth quarter. “Exported.” That’s about 17% of what we make. So that is very important, to be able to hit the foreign markets,” the CEO explained.

The company expects its export figure to go up to 1.5 million barrels a day globally in 2018. “That’s going to require more and more exports from the U.S. And the U.S. Gulf Coast refineries, they’re the best engines in the world,” added Heminger.

The CEO gave his views on Trump administration as well, and said that Trump is pro-energy and he is pushing for deregulation, which could lead to more infrastructure projects. “It’s very important that we continue to be able to build new pipelines. We need a lot of work and a lot of investment in the rivers. Both the Mississippi and the Ohio river, they need infrastructure investment. So the president and the administrator of the EPA, Scott Pruitt, are both very pro the energy industry,” he said.

Viewer calls taken by Cramer

John Deere (NYSE:DE) vs. Caterpillar (NYSE:CAT): Both are doing terrific, and the agricultural cycle is strong. Cramer said he would pick Caterpillar currently.

PayPal (NASDAQ:PYPL): Only 4% of the company’s net business comes from eBay (NASDAQ:EBAY). The stock went down as it had run up going into the quarter. It was a good one.

Insmed (NASDAQ:INSM): Don’t go down the food chain, as it’s a risky stock.